Tag Archives: murky finances

42. To the average hitchhiker, this is the answer. To Leeds United fans, it may turn out to be the same. Mere days after Leeds United announced the sale of captain Jonny Howson, Ken Bates used his slot in the programme notes to reveal part of the logic behind the club’s finances. Bates, facing up to accusations that he has been in charge of a regime that has underspent at Elland Road, announced that this year, Simon Grayson was permitted to overspend on his budget by an entire £2 million, therefore leading to him suggesting that logically, he was most certainly backing the manager. This led to a total spending of £11.5 million on the playing side of Leeds United.

Enough, you might suggest, at a cursory glance. The issue comes, however, when the rest of Leeds United’s murky finances are considered. At the club, turnover in 09/10 was £27 million, which, given the lack of financial success of the various ventures Bates has attempted to institute around the club (Yorkshire Radio, Howard’s Restaurant, the Hotel in the future), was essentially exclusively the responsibility of fans purchasing the division’s most expensive tickets, merchandise and the country’s most expensive programme. To these fans, the most important aspect of Leeds United is success on the pitch.

This is where that number becomes important. Of that £27 million of hard earned money ploughed into the club by the fans, a mere 42% is spent on altering what occurs on the pitch. The rest disappears into the previously mentioned various ventures, and £5 million falls into a column called ‘other’. Obviously at a club such as Leeds, with the history of unsustainably ‘living the dream’, it could be considered reasonable to curbing spending on the playing side of matters.

However, the logic simply doesn’t work. In League One and League Two, as announced at the beginning of this season, a wage cap of 60% of turnover is set to be instituted. This is what the Football League regards a sustainable level of wage to turnover, and is worthy of praise. Bates himself backs the new system. Leeds United, however, spend 42% not just on wages, but the acquisition of players as well. At the most extreme end of the hypothetical scale, therefore, Leeds United can only possibly at most spend 18% less than the conservative estimate for a sustainable football club. When the minimal transfer outlay of the club is also included, it becomes obvious that Leeds are spending well below their potential on players.

This leads to what Leeds fans are becoming increasingly riled about, the departure on an annual basis of the club’s best players. Jonny Howson was, until a few days ago, the club’s 23-year old homegrown captain. In the years prior to this one, Leeds have already allowed players such as Max Gradel, Bradley Johnson and Jermaine Beckford to leave the club due to ongoing contractual disputes. In Bradley Johnson’s case, there were suggestions he left in order to allow improvements to the club’s squad, but given his current position in a team 9th in the Premier League, this does not seem logical.

The outcome that most Leeds fans fear is the continued drain of talent away from the club, without improvements taking place in the squad. Rumours already abound that Robert Snodgrass has ended negotiations as the club refuse to give him parity with the best-paid players, despite the fact that often Leeds only look a threat when he is involved. Aiden White, a young left back who came through the academy, looks on the verge of leaving as his contract slowly runs out, and wages offered apparently don’t come close to reaching the level expected by a first-team player at a Championship club.

Ken Bates will continually attempt to use his bizarre set of logic to bamboozle sets of Leeds fans into his fold, but the reality is that by anyone else’s measures, Leeds United fans are having 58% of their funds diverted away from anything they care about, into a mysterious black hole that is to the interest of only one, bearded, man.

(NB: The figures refer to two different seasons. Bates’s estimates regarding turnover last season are around £30m, and whilst they may fall this season, it is unlikely they will drop below the League One turnover levels used in the article).